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17 Jun 2013, 03:14

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Ethics and Real Estate Agents

Originally submitted by emil10001 on Sun, 06/05/2011 - 20:58

I was recently doing some apartment hunting and found myself trying to answer a difficult question: do I think that it is ethical to use more than one real estate agent in my search for an apartment? I found myself leaning towards a qualified ‘yes’, but it was difficult for me to produce a worthwhile answer under the circumstances. Now that I’ve had a couple of days to think about it, I believe that I have been able to come up with at least a couple of reasons why I do not think that it is unethical to use more than one real estate agent in searching for an apartment.

Before I give my reasons, I might as well give you the details of how I came to face this question. If you don’t care about the back-story, then just skip down a couple of paragraphs. A bit of background, after a year of working at my telecommute consulting gig, my boss decided that it was time that we finally met face-to-face. He flew my wife and I down for the weekend to meet and visit. My boss presented me with a great opportunity for a promotion, but it would involve me being physically in the office. My wife and I thought it was a great idea and booked an appointment with a realtor to see a few apartments over the weekend. I was to be staying through the week and might have some time to see more properties during the week.

The realtor set up three showings for us on Saturday. I was a bit disappointed that we were only seeing three places, as my wife was only going to be in town for the weekend, and we really don’t want to have to make a second trip back to look at more apartments. During the showing of the second of three units, which I actually liked a lot, my wife let slip that I might be seeing some more places during the week. The realtor halted and said in a sort of playful tone, 'Oh, I hope you’re going to call me for those.’ To which my wife responded that I had been given a contact by my boss, and that I would probably be seeing at least a few places with her. I tried to diffuse the situation by saying that I hadn’t called the other realtor, and that I was really hoping to find something over the weekend. This was apparently not enough for our realtor.

At this point, she asked my wife and I to discuss whether or not we wanted to continue working with her, and said that she would not work with us unless she was the only realtor we were dealing with. I again said that I had not called the other realtor, but this was not enough. She was also not leaving us alone to discuss the situation, and kept pushing us to make a decision.

The realtor made the claim several times that it would be unethical for us to use a second realtor. Her reasoning was that she spent a few hours of working on our showings for which they may not get paid if we decided to rent through another agent. She then posed the question: Do you think it’s ethical to use more than one real estate agent, given that only one of them will get paid?

My initial reaction was that this was the work that she chose to do, and that to me, there was no expectation that we would be exclusively using a single realtor. I also felt that she was being manipulative in how she was raising the issue. She could have easily turned this around and showed us why we should stick with her as an agent. However, she was also free to make this demand, just as we were free to reject it. The question still remained.

I still think that the answer is a qualified 'yes, it is ethical’. Let me put the qualifiers down, first, I am only considering this from the point of view of a renter and not someone who is looking to buy a home or sell either a home or rental or anyone else involved. There are a couple of other important factors here, and those are selection and time. Realtors have a limited selection of properties to show, so going to multiple realtors will give me different options. The process of trying to find an apartment usually happens on a more compressed timeframe than one might like.

I will take these out of order, first regarding time. You typically don’t have a ton of time to go look at places, many times units aren’t on the market for very long and when you find a place, you shell out the cash immediately to avoid losing it. This means that you’re probably not going to be looking much further out than 2-3 months from when your lease is up, and even given that, you’ll probably only be looking for a week or two. This encourages people to see as much as they can in a short timeframe, and to do that, you might need more than one realtor. Then again, you might not, you might find a realtor who is able to devote enough time to you to find you a place to live. For this realtor, she decided that even though we travelled from Boston to Florida, and only had the weekend to look, showing us three places was good enough. Given all that, I don’t think that the time criteria is very compelling as it is too subjective and may rely on too many variables in a given situation, as is shown by the example that I gave from this situation.

I think that the stronger argument can be made by way of the selection criteria. If the property that I want to rent is represented by another realtor, then if I am faithful to my realtor, I will never get the property that I want. If I am going to commit to moving across the country to live in some place for a year, I want to make sure that I’m getting the perfect place for me (and my wife). This might be difficult to conceptualize by just thinking about it in terms of living spaces, so I’ve got a couple of other concrete examples.

Let’s say that I’m in the market for a new computer, I have a good general idea of what I will need to be able to do, but I don’t know a whole lot about the hardware. Now, my first stop is the Apple store, where I look at some nice MacBooks. There is a salesman that goes through the specs, talks to me about what I would like to do and shows me to a couple of models that might be a good fit for me. He wants me to buy a computer from him because he gets a commission. But, this is just my first stop, I still have some PCs to look at. So, I go across the street to the PC store, where a saleswoman also talks to me and shows me some PCs that might fit my needs. She also wants me to buy a computer from her, because she gets a commission. Was it unethical of me to go into the PC store?

Now that I’ve got my computer, I need to buy a new car. I know what size, and what fuel efficiency I want, but I have no idea what manufacturer I want to buy from. I go to the GM dealer first where the saleswoman shows me a couple of GM made cars that fit my criteria. She even accompanies me on a couple of test drives with these cars, and I’ve taken up several hours of her time. But, again, this is just my first stop, there are several other manufacturers to consider. My next stop is the Honda dealership, where a salesman talks to me about my needs and takes me out for test dives in a couple Honda cars. He also gives me several hours of his time. Was it unethical to go to the Honda dealership?

To me the answer to both of these questions is 'no, it was not unethical’. The reason is because there are different products being offered by each of the different salespeople. This is why I feel that it is not unethical to use more than one realtor, even though only one of them will get paid. They are sales people, and this comes with the territory.

If things were a bit different, however, I would be inclined to go a different way. If the first computer store that I went to was, say, a BestBuy, where they have both Mac and PC computers, and I was helped by a salesperson. Then i go into Fry’s, where they have the same selection of computers at the same prices and am helped by another salesperson. If I knew beforehand that that the pricing was going to be the same, and that the only thing that I would accomplish by going to Fry’s would be to take away the first salesperson’s commission, that might be unethical. Then again, the salesperson at BestBuy might not have sold me on anything while the salesperson at Fry’s does sell me on something. The same goes for the car salespeople. If the dealerships had the same inventory, and the salesman at dealership A showed me the same vehicles as the saleswoman at dealership B, then that might be enough to open the argument up again. Following this, if the various realtors had the same properties to show, and the same availability to show them, then it might be considered unethical for me to use another realtor. However, in that situation I would have no reason to contact another realtor.